INVESMENT MANAGEMENT FIN603 FINAL ASSIGNMENT

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COURSE TITLE:

INVESMENT MANAGEMENT

Students:

ID:

Lecturer:

UBIS INTAKE 5:

APRIL 2020

1 Create an investment portfolio Luckily, I won the lottery with VND 50,000,000,000 After have great fun, I have a great

problem that is how to use the money for more benefit

Below is my decision:

Total money 50,000,000,000 VND # USD

2,369,668.25 Time invest 12 month

USD/VND 21,100

EUR/USD 1.3836

Discount rate 10% year

Visa inc LVMH Vnamilk Real estate Grow rate

expect after 1

year invested 20% 10% 14% 20%

Unit: USD

Sector Company Region Weight Money invested Price Number of

things

Deposit HD Bank Asia 15% 355,450 2% 1

Vietcombank Asia 15% 355,450 1.5% 1

Stock

Visa inc US 15% 355,450 196.63

1,80

8 LVMH EU 10% 236,967 102.05

2,32

2 Vinamilk Asia 10% 236,967

6

78 34,951 Real Estate PMH Asia 30% 710,900

3,100/m

2 230m2 Cash City Bank US 5% 118,483 0.01% 1

Display weight of investment by chart pie:

710,900 ; 30.00%

829,384 ; 35.00%

710,900 ; 30.00%

118,483 ; 5.00%

Weight

Diposit Stock Real Estate Cash

Interpretation:

- To share risk, the portfolio is as follows: Certificates of deposit: 30%, this is a stable array of investment, almost no risk but low profitability

- Stock: 35%, this segment has high profitability but also the corresponding risks

- Real estate: 30%, this segment has high profitability but moderate risk

- Cash: 5%, the amount of the reserve, to anticipate good business opportunities, unexpected

Display investment by region:

4; 57.14%

2; 28.57%

1; 14.29%

Region

Asia US EU

Interpretation:

- Asia: 57%, corresponding to 4 areas: deposit, stock, real estate and cash accounts

- U.S: 29%, corresponding to the stock and deposit

- EU: 14%, corresponding to the stock

2. Explain to support the decision

Mobilized capital for investment from lottery winnings, thus capital costs depend only on the owner's expectations I am a conservative, risk averse, thus yielding the expected 10% / year, higher savings deposits in VND a little

Portfolio should include the following three basic elements: capital adequacy, profitability and liquidity Depending on the perspective of the owner that is the proportion of the three components on the corresponding are differences My point is:

With ranking from 1 to 4, with 1 is lowest and 4 is highest we have a decision matrix:

Item Capital adequacy Liquidity Profitability Sum

With the matrix above, we see CDs and Cash have biggest point, after that is Stock and the final is Real estate Therefore, I like to use my money which in the order above points

The proportion CDs accounted for 30% of the portfolio In CDs, we must also divided, one part sent to a medium-sized banks to enjoy high interest rates, and the rest sent to large banks

to ensure a safe, of course deposit rates also slightly lower

Cash is a very important factor in the prevention to spend, to invest in business opportunities sudden, large profitability For cash, liquidity and safety is very high For convenience in transactions worldwide, choose to open bank accounts also noteworthy Banks must ensure that there is a worldwide network, strong financial liquidity great, and City bank is a bank is selected The proportion of cash accounts for about 5% of the total investment is appropriate For stock invest, my point is to invest in 3 different markets, with different kinds of stocks to ensure safety, efficiency and liquidity, as follows: 35% of the total investment amount of fund in stocks, in which the proportion of the market as follows:

The proportion

of the market 43% 28.5% 28.5% 100%

In each market, the stock options of any industry should also consider investing For the U.S market, technology sector and financial, banks thrive, so Visa Inc stocks is selected For EU, fashion and accessories industry thrives, so LVMH is selected stocks And finally, Viet Nam

is a developing countries, the demand for essential food, which especially milk products -will be used to increase the height and prevent osteoporosis -will be very large, so stock Vinamilk has been selected

The proportion of shares 43% 28.5% 28.5% 100%

For real estate, choosing to invest in HCMC, is a financial center of Vietnam However, the real estate market itself HCMC also has many areas for growth, profitability and liquidity are also different After studying the information from various sources such as CBRE Vietnam, Savills Vietnam, real estate professionals, is selected to decide to choose luxury urban area Phu My Hung, District 7, HCMC This is the most modern urban Vietnam, focusing a lot of great wealth, the famous artist, foreign investors to live and work

In real estate there are many products, choosing the right products to investors is also an art According to research by CBRE Viet Nam, product segment luxury apartments and commercial office supply now outstrips demand a lot Therefore, in round 1 next year, commodity prices at this difficult segment rose Only the land segment, townhouses, villas are also growth opportunities, including the ground segment has the highest liquidity The current market value of the land around $ 3.100 / m2, => land area is expected to buying about 230m2

3. Will you put more than 50% amount of the money to invest into the property

because it has reached the bottom?

This is my answer: Absolute no Why?

Because: Strategies for real estate investing of I is focus on the emerging markets, and Viet Nam

is my choice But according to my assessment,

Property prices Viet Nam although greatly reduced in the last 7 years but the price is still very high, not to return to its true value

The liquidity of the real estate market is still relatively low Viet Nam

It’s caution, screened in select real estate products, geographical area

The following is the opinion of experts on the question "Viet Nam real estate hit bottom?”

In the column "My Viewpoints", VnEconomy interviewed 13 managers, professionals and leaders of the major real estate companies such as CBRE, Savills The results are as follows: 5 respondents are touching bottom, 2 respondents not, 5 people have different opinions Thus, more than 58.33% not in agreement with the statement Viet Nam real estate has hit bottom

[ CITATION Ngu14 \l 1033 ]

According to the analysis, the statistical indicators of the real estate of listed on the Vietnam stock market At 7/2009, at the start of the financial crisis in Viet Nam, the value is # 100, to a peak # 220 of 12/2009 Then, the index continued to fall, at 2/2013, around 120 Such could see property prices of Vietnam is relatively high compared to 2009, and of course is still very high compared with 2000, at Vietnam started strong innovation economy Details see chart below:

Sources: Stoxplus

A real estate product is another important office for rent Rental price fell in 2013 compared with Q2/2008 peak, but still has not changed much from 2007

The chart below is the price for Grade A office space and class B

sources: CBRE

The chart below shows more clearly the decline in the price and volume of real estate transactions in the period from 2000 to 2011

Sources: CBRE Viet Nam

We easily see, the price of real estate securities within 1 year decreased 80%, from 25 to less than 5, the volume of transactions fell by more than 90%, from 67,000 to less than 10,000 The liquidity of real estate dropped very low, would not say that "freeze"

However, depending on geographic location, regional liquidity levels are also different As in HCMC, the largest economic center of Vietnam, the emerging district as District 7, District 2, District 9 speed transfer of real estate is also quite high We can refer to a study by CBRE in

2013, according to District 7 which is an area of active buying and selling, promoting, marketing, real estate highest with 19%, followed by District 9 to 10 %, District 2 to 8%, and the time of 10/2013 time of big events to promote the most since May 3/2013

In summary, the present time is not the best time to expand the scale of investment in the real estate portfolio At the same time, many areas are still good investment opportunities, it is important we realize it or not

4 The returns expect at the end of this year

Visa inc, price statistics from 04.26.2013 to 04.25.2014, the share price rose 21,33% The U.S macroeconomic news in 2014 continued stability and growth, however in the event Crimena incorporated into Russia, causing a disagreement with the U.S and Europe is an obstacle to the development of Visa inc Combining the two issues above, the expected 2014 Visa Inc stock price growth of 20% [ CITATION NYS14 \l 1033 ]

LVMH, in the last year, from May 4/2013 to 4/2014 LVMH share price rose from EUR 129.15 to EUR 142.65, equivalent to 110.45% Macroeconomic situation world, especially Europe and the United States is gradually restored, creating economic incentives for development, including LVMH Therefore, expectations in 2014, LVMH share price will increase by 10% compared to 2013 [ CITATION Blo14 \l 1033 ]

VNM, is one of the best stocks in Vietnam at present, in the past year's stock price rose from $ 5.78 VNM (# USD 122,000) to $ 6.59 (# VND139.000), up 14% compared with 2013 macroeconomic information such as inflation, interest rates, GDP of Vietnam pretty good in

2014, so expect the stock price growth rate in 2014 is equal to 2013, ie 14% / year [ CITATION Sto14 \l 1033 ]

Phu My Hung is one of the rare urban luxury in Viet Nam has not reduced property prices, or even increased in recent years, especially those super villa is priced from $ 3-5 billions

In addition, the area of urban land availability was running out, so hurry on this investment will

be a right strategy Expect prices to rise 20% in the year

Here is the result of investment spreadsheet:

Return of portfolio:

HDBank (355,450) 0 0 0 362,559.24

Vietcombank (355,450) 0 0 0 360,781.99

City bank (118,483) 0 0 0 118,495.26

Visa inc (355,450) 0 0 0 426,540.28 NPV $32,313.66

LVMH (236,967) 0 0 0 260,663.51 NPV -

Vinamilk (236,967) 0 0 0 270,142.18 NPV 8,616.98

PMH (710,900) 0 0 0 853,080.57 NPV 64,627.32

(2,369,668.25) 0 0 0 2,652,263.03 NPV 41,479.97

Thus the portfolio is quite effective, after a year of investment NPV> 0 and IRR> discount rate

% percentage capital gain of each investment Sector Company Region Weight Money return

Deposit HD Bank Asia 14% 362,559.24

Vietcombank Asia 14% 360,781.99 Stock

Visa inc US 16% 426,540.28 LVMH EU 10% 260,663.51 Vinamilk Asia 10% 270,142.18

Real Estate PMH Asia 32% 853,080.57 Cash City Bank US 4% 118,495.26

% capital gain of the portfolio Sector Company Region Weight Money invesed

Deposit HD Bank Asia 15% 397,839

Vietcombank Asia 15% 397,839 Stock

Visa inc US 15% 397,839 LVMH EU 10% 265,226 Vinamilk Asia 10% 265,226 Real Estate PMH Asia 30% 795,679 Cash City Bank US 5% 132,613

References

Bloomberg (2014, 04 25) LVMH Moet Hennessy Louis Vuitton SA Retrieved 04 26, 2014, from

bloomberg.com: http://www.bloomberg.com/quote/MC:FP

Cuong, N (2014, 03 11) Real Estate: The bottom or not? Retrieved 04 19, 2014, from bizlive.vn:

http://bizlive.vn/thi-truong/bat-dong-san-day-hay-chua-114971.html

NYSE (2014, 04 25) Visa Inc Retrieved 04 26, 2014, from google.com/finance:

https://www.google.com/finance?

q=NYSE:V&sa=X&ei=DyJbU6_cMNL38QXorIGwDg&sqi=2&ved=0CCYQ2AEwAA

Stockbiz (2014, 4 25) Vietnam Dairy Products JSC (VNM : HOSE) Retrieved 4 26, 2014, from

http://en.stockbiz.vn/: http://en.stockbiz.vn/Stocks/VNM/Overview.aspx